Tuesday, 19 December 2017

It
is becoming very obvious these days that the Central Government
employees and pensioners are fast losing interest in Dearness Allowance.

Dearness
Allowance is given to the Central Government employees once every six
months, in order to help them maintain their lifestyle against the
rising prices. Fluctuations in the prices of 392 essential items are
recorded regularly at 78 various locations and their data is tabulated
once every month to calculate the All India Consumer Price Index
Number (AICPIN), which is then released by the Centre. Dearness Allowance
is thus calculated.

For eight years now, we have been calculating
the Dearness Allowance in advance and releasing the numbers. This is
why we are able to sense an acute loss of interest among the Central
Government employees in recent times to know their next and expected
Dearness Allowance.

Dearness Allowance is calculated with the
employee’s basic salary. For example, a 5 percent Dearness Allowance for
an employee who draws a basic salary of Rs. 7000 per month, will
translate into Rs. 350. An employee drawing basic salary of Rs. 20,000
will get an additional Rs. 200 if 1 percent Dearness Allowance is
sanctioned.

All the Central Government employees, defence
personnel and pensioners are now being paid as per the recommendations
of the Seventh Pay Commission, from January 2016 onwards. The Seventh
Pay Commission had recommended that no changes shall be made in the
Dearness Allowance calculations and the method adopted by the Sixth Pay
Commission continues to be followed. The centre too had accepted the
recommendations.

Under the Sixth Pay Commission method, the
Dearness Allowance had increased by 125 percent in the past ten years,
from January 2006 to December 2015. It is worth mentioning that at least
thrice, a Dearness Allowance of 10 percent was paid to the employees.
The table below shows the Dearness Allowance that was paid once every
six months.

The loss of interest among the employees probably has
something to do with the fact that the increase in Dearness Allowance
has only been marginal ever since the Seventh Pay Commission was
implemented.

There was no Dearness Allowance for the first six
months, January to June 2016. Dearness Allowance of only two percent was
given for July to December 2016. It looked as if something was wrong
with the calculations, right from the start, but the employees thought
that things will improve with time. The Dearness Allowance for January
to June 2017 was a mere one percent, which came as a rude shock to all.

The centre claimed that it was because they have the prices under
control.

So, what is the Dearness Allowance for the second term of 2017, July to
December 2017, likely to be?

This time too, it is not expected to exceed two percent.

We expect the Dearness Allowance to be 7% with effect from January
2018.